Crypto Market Overview

Crypto markets have continued their underwhelming performance this week as risk sentiment remains vulnerable ahead of the release of the U.S. inflation report for July.

Polkadot Price Pressure

Polkadot price has faced pressure, falling around 3% in the past 24 hours to $4.45. Despite the drop, this altcoin remains up roughly 6% in the past week, marking a notable recovery after reaching as low as $3.6 at the start of this month.

Optimism Surrounds Future Prospects

Long-term, investors maintain an optimistic view on DOT’s prospects. Many believe the Polkadot blockchain ecosystem will be crucial in the Web3 technology revolution, which aims to decentralize the web and empower creators and consumers, moving away from centralized control by major social media platforms.

Investors are also excited about the proposed JAM upgrade, introduced by Polkadot founder Gavin Wood. This project will replace the current central relay chain with the more advanced, flexible JAM network, promising enhanced security and efficient cross-network communication. Although JAM is still in development and unlikely to be released before 2025, its potential to boost productivity is expected to support DOT’s price growth over time.

DOT/USD Technical Analysis

Looking back, the Polkadot price reached a peak of $54 in the fall of 2021, just before the onset of the global inflation crisis. Across four years, the average price of Polkadot has been around $13, which is over 190% higher than its current levels.

The recent correction pushed the DOT price towards $3.5, a massive horizontal support that provides strong backing. A sustainable bounce off this support could lead to resistance around $6-7.

More importantly, this bounce has created potential for a double bottom formation, which can be activated if the price penetrates through the neckline, just below the $12 handle. In this case, Polkadot is likely to continue rallying and may eventually reach the $20 zone, marking the completion of the double bottom pattern, contingent on more favorable risk sentiment.